Read excerpts from Advanced Business: Exponentially Increase Stakeholder Value. The book was published on July 4, 2015 and shows ways to be much more successful. Copyright 2015 Donald W. Mitchell. All Rights Reserved.

The book is available in paperback and electronic form at all online bookstores.

You can read about the related book, Business Basics, at http://businessbasicsbook.com/

Excerpts follow:

Foreword

The global economy is turbulent today. Money flowing from one country to another country can be a powerful force facilitating economies or spreading a global economic crisis. You can’t succeed by looking at the world from just one location, one perspective, or one set of interests.

Trade is borderless. The market continually shifts the links in the total supply chain between countries that produce raw materials and the countries that manufacture and supply global customers and end users. To stay ahead of the current complexities of today’s business environment requires that business leaders have a deep understanding of how their organizations connect now and should connect in the future to the total value chain for the industry they serve. In doing so, today’s businesses touch more lives and affect more interests than ever before, increasing the challenges of adding value for all stakeholders.

What happens when the world changes faster than our organizations do? Donald Mitchell’s book, Advanced Business: Exponentially Increase Stakeholder Value, answers that question and provides solutions for becoming the driving force for making helpful improvements.

Part One describes the better choices for adding value to eleven classes of stakeholders, from end users to the communities a firm serves. Part Two spells out how investors determine value. Part Three identifies ten strategies that can add value for all stakeholders. Part Four relates three operating methods for increasing value. Part Five has four human-resources practices for enhancing value. Part Six addresses seven financial techniques for boosting value. Part Seven contains seven communications practices for value expansion. Part Eight pulls together in six lessons how to develop and implement an optimal value-improvement program.

Advanced Business is the most excellent business management book that I have ever read. This book covers the basics of how to be successful in the modern business world by creating increased benefits and value for all stakeholders, rather than just for the company’s owners. This book will benefit both business students and leaders of organizations by guiding them in how to put Dr. Mitchell’s expert business concepts into practice.

Dr. Donald Mitchell was an excellent advisor to me when I worked on my Ph.D. program at Rushmore University, suggesting that I develop the optimal order for expanding the value of an organization and its stakeholders. Reading and applying the lessons in Advanced Business will enable you to gain from his expert advice, as well.

I was pleased to see that some of the concepts in Advanced Business have been successfully practiced in our organization and in many large companies. For example, 30 years ago I set up business as a small trading company distributing DuPont’s products in Thailand. I learned how DuPont grew its business from a gunpowder maker to become a leader in the chemical industry by increasing stakeholders’ value. We and end users of DuPont’s products fully benefited from its expanded offerings.

Currently, our business, Innovation Group, has grown from being a distributor of DuPont products to being one of the leaders in polymer technology. We have become a global company supplying rubber compounds, parts, and technology services to major brands of car makers in many countries. Innovation Group is one of the main suppliers of rubber products for Japanese cars and has learned from the concepts of Japanese car manufacturers in increasing technology value along the supply chain. They are becoming technologically competitive and cost efficient by building cooperative, long-term profitable relationships with business partners along the total supply chain.

All these successful business concepts are fully described in Dr. Mitchell’s book.

Advanced Business is an excellent book that I fully recommend you read and apply.

Dr. Banja Junhasavasdikul, Ph.D.

Chairman of the Board of Directors,

Innovation Group, Thailand

Bangkok, Thailand

February 2015

Introduction

Yes, the LORD will give what is good;

And our land will yield its increase.

— Psalm 85:12 (NKJV)

The information in Advanced Business: Exponentially Increase Stakeholder Value has been selected from among The 400 Year Project’s most powerful, easily appreciated, and readily applicable lessons accrued during the project’s 19 years of research and practice. Many of these lessons were initially developed during 2010 and 2011 for The Billionaire Entrepreneurs’ Master Mind, a consortium of entrepreneurs for learning and applying the latest generation of The 400 Year Project’s best practices to achieve more than breakthrough success. Versions of seven lessons in Advanced Business also appear in the for-profit edition of Excellent Solutions (400 Year Project Press, 2014). All the lessons also have deep roots in earlier research and testing done by Share Price Growth 100, a partnership of global leaders that Carol Coles and I directed in developing many of the current best practices for expanding shareholder value. All fifty lessons have been updated, expanded, and improved to increase their usefulness.

Advanced Business: Exponentially Increase Stakeholder Value is different from many other value-improvement books in that it pays attention to ways of benefiting all stakeholders, rather than just the company’s owners. If you aren’t familiar with the term “stakeholder,” let me explain what I mean. Anyone who is substantially affected by an organization or a company has a stake in how its activities are conducted. The concept of an individual or organization having a stake has been used to describe such an individual or an organization by the word stakeholder. Such individuals and organizations include all those who contribute to, benefit from, or are significantly affected by a company’s existence and its actions, potentially including some of the following: end users of offerings and benefits, customers, customers’ customers, distributors, dealers, agents, suppliers, suppliers’ suppliers, employees, employees’ families, partners, shareholders, lenders, lessors, neighbors, the communities in which the organization operates, and anyone else who is substantially affected by the organization.

Some might be tempted to dismiss such a broader focus on who should benefit from a company as being some form of impractical idealism. While many of those who advocate such a broadening of who should benefit from a company or organization base their thinking solely in what increases their emotional comfort, Advanced Business: Exponentially Increase Stakeholder Value takes its guidance differently. First, direction comes from God’s Word, the Bible. Second, insights into how to apply the Bible’s guidance have been gained from the Holy Spirit concerning the many practical ways that providing more benefits to more stakeholders enhances the value of what the stakeholders contribute to making the company more effective. Such increased stakeholder contributions, in turn, can power virtuous cycles of expanded stakeholder and company capabilities, resources, accomplishments, and benefits for sharing.

To demonstrate these perspectives concerning stakeholder value, each lesson includes pertinent selections from the Bible and explains how they apply to expanding value and improving stakeholders’ lives. The lessons also describe ways that the interests and efforts of stakeholders and the company can be aligned so closely that any improvements will automatically translate into much more effectiveness and benefits for all.

Let me also explain what I mean by “value.” When academics refer to shareholders, this term has primarily come to mean having a higher current price for all of a company’s shares. In ordinary speech, of course, value also suggests acquiring something for less: a bargain. In contrast to the first two meanings, we often think of a value as describing what we esteem for guiding our lives, regardless of its current or potential financial worth. While this book often overtly focuses on value in financial terms, either owning something that increases in economic worth or acquiring offerings at less cost, the book also advances Biblical values by basing the advice on the perspective of what God values. While we may not know exactly how to measure value in God’s terms, we should certainly not pay any less attention to advancing it.

For instance, consider Jesus’ words in Matthew 6:24 (NKJV): “No one can serve two masters; for either he will hate the one and love the other, or else he will be loyal to the one and despise the other. You cannot serve God and mammon.” (If you aren’t familiar with the word mammon, it refers in this context to worshiping riches, as though they were personified as a god.) In relating ways to acquire more financial resources and pay less for what is needed, we should always keep in mind that any such benefits should be directed towards advancing God’s Kingdom, rather than some selfish purpose of our own. Otherwise, we will simply be worshiping money rather than God, a great sin. We should see using any money developed in this context as simply a means for accomplishing that most important purpose, God’s will.

I mention this point now because I have seen variations of some methods described in this book applied solely for selfish purposes. What’s the lesson from such applications? I cannot recall seeing any lasting good come from such misdirected uses. So I hope you will apply this information to demonstrate God’s greatness to the world and to use the resources He supplies through these methods to glorify Him while serving His purposes.

Other 400 Year Project books contain useful guidance for ways to use increased resources for God’s purposes. If you aren’t yet familiar with these books, I suggest that you read some or all of them before or while you read and apply this book. A good starting point is 2,000 Percent Living (Salvation Press, 2010), which describes how to be 20 times more fruitful for the Lord. If you want do delve deeper into the subject of being fruitful, I also suggest Help Wanted (2,000 Percent Living Press, 2011). For those who want to focus on witnessing, I recommend Witnessing Made Easy (Jubilee Worship Center Step by Step Press, 2010) and Ways You Can Witness (Salvation Press, 2010). For anyone who wants to help make a whole nation more fruitful for the Lord, be sure to read and apply The 2,000 Percent Nation (400 Year Project Press, 2012).

As you read about the many ways to increase value for all stakeholders, you may find it helpful to think about how the knowledge could help with increasing and improving a community of believers. Such a reference should increase your focus on making fruitful use of what God provides through these amazing methods, reducing your temptation to use the resources in un-Godly ways.

By implementing the 50 lessons in Advanced Business: Exponentially Increase Stakeholder Value in conjunction with the 50 lessons for expanding market growth, slashing costs, and eliminating unnecessary investments in Business Basics (400 Year Project Press, 2012), a company can increase total value for its stakeholders by 160,000 or more times. Future volumes in the Advanced Business series will demonstrate how to build stakeholder value from this level to 3,200,000 or more times through encouraging competitors to copy your innovations, and then by 64,000,000 or more times through also profiting from serving important social needs. Be sure to read and apply these two additional sets of value-expanding lessons when they become available!

While some might see these potential gains as either being impossible or not very probable, keep in mind that the for-profit edition of Excellent Solutions already provides two improvement processes that can be used to expand stakeholder value by over ten trillion times. In addition, The 400 Year Project has already produced such degrees of expanded benefits through the many people who have applied its God-directed research.

Business Basics and Advanced Business: Exponentially Increase Stakeholder Value can also be used as sources of helpful perspectives and ideas for applying the astonishing value-expanding processes presented in Excellent Solutions. For instance, lessons in Business Basics and the Advanced Business series can help identify possible value elements to be included in an excellent solution that is developed by using one of the two Excellent Solutions processes.

Let me explain other ways to use Business Basics and Advanced Business: Exponentially Increase Stakeholder Value to create the stakeholder benefits of an excellent solution. If any of the six complementary improvements described in Business Basics or the three books in the Advanced Business books’ lessons is enhanced for a second time with a new complementary 2,000 percent solution, total stakeholder value would expand by 1.28 billion times. By sequentially improving any one of the six complementary dimensions on four different occasions by 20 times each (or improving for a second time any four of the combined six dimensions on one occasion by 20 times), total stakeholder value would then grow by 10 trillion times. By expanding performance in these six complementary dimensions through the lessons supplied in these books, most for-profit company leaders would be able to design and implement such large value-improving solutions much more rapidly, with reduced effort, and less expensively than by separately developing ten complementary 2,000 percent solutions to gain the same result.

As I discuss in Adventures of an Optimist (Mitchell and Company Press, 2007), two other value dimensions that are partially addressed in Business Basics, Advanced Business: Exponentially Increase Stakeholder Value, and Excellent Solutions can also complement these six value dimensions:

1. Lower the cost of capital by 96 percent.

2. Engage many underutilized people (such as those who are unemployed or underemployed) in highly productive activities.

You can find more information about the first of these two dimensions in some of this book’s lessons concerning how to increase equity value. As you think about these ways of expanding value by lowering the cost of capital, I’m sure your imagination will be stimulated to identify still other opportunities. Excellent Solutions sufficiently discusses topics similar to the second of these two added dimensions to eliminate the need for additional lessons here.

Are there any other complementary dimensions that a for-profit company can use as performance enhancements for greatly expanding stakeholder value? Yes, I believe that there are many more than just the two dimensions I’ve just mentioned. I list here two more:

1. Invest in upgrading the skills, knowledge, and resources of many underdeveloped people, especially those with little education and experience, so they can make maximum contributions to all stakeholders and then continue operating in partnership with those who can, as a result, accomplish still more.

2. Redirect the public’s agenda, attention, and resources into improving or increasing highly valuable activities and resources at little cost.

Feel free to add any other complementary performance dimensions that you prefer.

Let me also note that this book is about for-profit businesses. However, aspects of the discussions about increasing stakeholder value are equally, if not more, applicable to nonprofit organizations.

If you have questions or would like to discuss any of these dimensions, processes, or methods, please send an e-mail to askdonmitchell@yahoo.com/.

To make the lessons in this book easier to understand and use, they are divided into eight parts, which concern the following subjects:

1. What stakeholder benefits to provide

2. How investors assess value

3. Business strategies that add value

4. Operating methods that increase value

5. Human-resources practices for growing value

6. Financial techniques for boosting value

7. Communications procedures for value expansion

8. Identifying the optimal value-improvement program

I encourage you to direct your colleagues to those parts that will be most relevant to their responsibilities. Doing so will make it easier to redirect your activities in the most fruitful ways.

Let me briefly explain the potential benefits of studying and applying each part. Some readers will not be able to fully identify who a for-profit company’s stakeholders are and what kinds of benefits are usually most available and appropriate to provide and increase for each one. Reading the first part will eliminate any of such knowledge gaps. With a broader perspective concerning who is to gain value and of what sort, studying the subsequent lessons will be enriched by appreciating more kinds of useful applications.

Improving value for shareholders can be a key ingredient for expanding value for other stakeholders, as well. In particular, for-profit companies can use stock-price expansion to create financial resources other stakeholders can use to add value beyond what the company can do directly. Paying attention to this subject has another benefit: Many people have not been exposed to the most accurate information about how investors decide whether to purchase, hold, or sell an equity security. Naturally, those who normally don’t think about financial markets have even less knowledge on this subject. The second part’s lessons in this regard are simple enough to be helpful to such readers. In addition, the lessons address common misunderstandings found among some of those who are literate, as well as expert, concerning financial markets. Even if you have earned a finance degree in business school, you may find some of this information expanding the ways you can apply your knowledge.

Traditionally, business strategy has emphasized outperforming competitors in profiting from attracting and retaining customers. In doing so, potential effects on many types of stakeholders have too often been ignored. For example, just think about how discarded water bottles might eventually cover an ocean’s surface from continent to continent if different approaches aren’t adopted. Consider, too, how a better kind of bottle floating in those waters could conceivably be designed to dissolve and supply helpful nutrients for making the oceans more bountiful. As this example shows, examining business strategy in the context of expanding value for all stakeholders often leads to applying quite different concepts and means for implementing them. In the third part, you will find your perspective on business strategy redirected into such broader and more fruitful directions.

Conventional approaches to examining business operations have emphasized increasing accounting profits, operating cash flows, returns on capital or equity, or similar financial metrics discounted into the future. In seeking such financial goals, many companies have actually reduced total stakeholder benefits, sometimes intentionally and other times accidentally. Some leaders who intended to expand shareholder value have been subsequently disappointed by their resulting stock prices. In the fourth part, we look at business operating methods that many executives do not realize can produce substantial benefits for all stakeholders, while also increasing financial returns.

Human-resources practices are usually aimed at achieving a narrow set of financial goals. In the fifth part, we look more broadly at how stakeholder value can be expanded by pursuing more appropriate goals, as well as how employees and employees’ families can be better served in ways that will also increase company effectiveness.

While many executives see the term value as being synonymous with financial measures, most companies still ignore many powerful financial opportunities that could have huge positive impacts on monetary value for stakeholders. As an example of such a narrow focus, many companies for which I have consulted once saw the role of the financial staff as merely to find profit-expanding accounting methods and obtain low-cost loans. In the sixth part, we demonstrate the much greater potential of finance to complement what the rest of the organization and its stakeholders are accomplishing. While some of this material will only seem appropriate for financial executives, I encourage all readers to gain a conceptual understanding of the possibilities from these lessons, so that they can advocate more appropriate roles for financial executives in increasing stakeholder value.

Company leaders have always been concerned about not disclosing sensitive information beyond those with a need to know. In some cases, such concerns relate to keeping competitors in the dark to gain or retain an advantage in the marketplace. In other instances, the difficulties of correctly anticipating the future make leaders reluctant to make public commitments that they might not be able to keep. In still other circumstances, some have not appreciated the potential value of communicating more fully, incorrectly seeing this activity as relatively unimportant. In particular, almost all companies are ignorant of the value-improvement potential of assembling the right group of shareholders. The seventh part explains the critical roles for communications in expanding stakeholder benefits. We also look at what kind of shareholders to seek and encourage.

Having read my brief comments about the lessons in the first seven parts, your head may be filled with unanswered questions about how to implement what you will learn: where to start, which directions to take, and the right order for your actions. It’s natural to have such a reaction. You have an almost infinite number of choices. Yet only a tiny fraction of 1 percent of these actions and the permutations for sequencing them will lead to huge increases in value for all stakeholders. In the eighth part of the book, I describe a proven, long-practiced method for developing and applying the necessary information to make the optimal choices. Unlike many other decision processes involving complicated choices, the one described in the eighth part is quite easy to understand, learn, and apply. In fact, after the necessary information is in place, most leaders will be able to develop and evaluate high-value choices quite quickly and accurately without assistance from anyone with special technical skills or experience.

By the time you finish reading Advanced Business: Exponentially Increase Stakeholder Value, your perspective for what it means to “do business” will have permanently become more fruitful. You will understand many new ways for stakeholders to make unique and important contributions to your firm’s success and enhance value for all. In addition, you’ll see how the task of effectively leading a company is made much easier by doing more for stakeholders. Shifting to this approach will feel as if a large number of people have suddenly started lifting their fair share of the heavy weight you have been carrying alone: Your burden in increasing stakeholder value will be much less, and you’ll be highly encouraged to have so many helpers assisting with any new loads.

Be sure to read the Appendix, as well, where I describe my Christian experiences and testimony. Feel free to share this information with anyone you feel would benefit from learning about how God has touched and improved my life.

We now begin in Part One by looking at what stakeholder benefits to provide.

Contents

Acknowledgments

Foreword

Introduction

Part One: What Stakeholder Benefits to Provide

Lesson One: Stakeholder Benefits for End Users

Lesson Two: Stakeholder Benefits for Customers and Customers’ Customers

Lesson Three: Stakeholder Benefits for Distributors, Dealers, and Agents

Lesson Four: Stakeholder Benefits for Suppliers and Their Suppliers

Lesson Five: Stakeholder Benefits for Employees

Lesson Six: Stakeholder Benefits for Employees’ Families

Lesson Seven: Stakeholder Benefits for Partners

Lesson Eight: Stakeholder Benefits for Company Shareholders

Lesson Nine: Stakeholder Benefits for Lenders and Lessors

Lesson Ten: Stakeholder Benefits for Neighbors

Lesson Eleven: Stakeholder Benefits for Communities

Part Two: How Investors Assess Value

Lesson Twelve: Valuation Methods

Lesson Thirteen: Factors That Affect Valuations

Part Three: Business Strategies That Add Value

Lesson Fourteen: Diagnose Value Sensitivities

Lesson Fifteen: Accelerate Improvement

Lesson Sixteen: Establish a Business Model That Is Expandable in Several Dimensions

Lesson Seventeen: Enter a New Business with Significant Cost and Value Advantages

Lesson Eighteen: Merge with Strategically Complementary Businesses to Overcome Weaknesses in Both

Lesson Nineteen: Focus on Businesses with Offerings Stakeholders Regularly Experience and Like

Lesson Twenty: Reduce Risks That Make Stakeholders Squirm

Lesson Twenty-One: Be a Franchisor

Lesson Twenty-Two: Be a Licensor

Lesson Twenty-Three: Be Based Where Owners Will Pay the Most

Part Four: Operating Methods That Increase Value

Lesson Twenty-Four: How 2,000 Percent Solutions Affect Value

Lesson Twenty-Five: How to Pick 2,000 Percent Solutions That Improve Value

Lesson Twenty-Six: Demonstrate How to Overcome Apparent Growth and Profit Limitations

Part Five: Human-Resources Practices for Growing Value

Lesson Twenty-Seven: Change Value Forms to Stimulate Management

Lesson Twenty-Eight: Add Critical Skills and Knowledge before Competitors

Lesson Twenty-Nine: Quickly Identify and Remedy Harmful Errors

Lesson Thirty: Put Leaders in More Appropriate Roles

Part Six: Financial Techniques for Boosting Value

Lesson Thirty-One: Employ Valuable Cross-Ownership among Stakeholders

Lesson Thirty-Two: Finance Growth with Customer Advances

Lesson Thirty-Three: Minimize Taxes for All Stakeholders

Lesson Thirty-Four: Turn Volatility to Your Advantage

Lesson Thirty-Five: Use Futures Contracts to Enhance Attractiveness

Lesson Thirty-Six: Offer Convertible Securities

Lesson Thirty-Seven: Pay Extraordinary Dividends in Low Interest-Rate Environments

Part Seven: Communications Procedures for Value Expansion

Lesson Thirty-Eight: Create and Maintain a Perfect Balance of Investors

Lesson Thirty-Nine: Identify and Attract Supportive Investors

Lesson Forty: Influence Expectations

Lesson Forty-One: Inspire Confidence

Lesson Forty-Two: Continually Attract Investors to Special-Situation Opportunities

Lesson Forty-Three: Clearly Signal What’s Coming

Lesson Forty-Four: Continually Draw in New Stakeholders

Part Eight: Identifying the Optimal Value-Improvement Program

Lesson Forty-Five: Plan a Value-Improvement Program

Lesson Forty-Six: Start Your Value-Improvement Program with Stakeholder Conversations

Lesson Forty-Seven: Determine Your Valuation Correlations and Sensitive Actions

Lesson Forty-Eight: Prepare and Analyze Relevant Case Histories for Sensitive Actions

Lesson Forty-Nine: Analyze Stakeholder Conversations, Verified Correlations, and Case Histories to Create a Value-Improvement Program

Lesson Fifty: Next Steps for Implementing Your Value-Improvement Program

Appendix: Donald Mitchell’s Testimony

Part One

What Stakeholder Benefits to Provide

You have increased the nation, O LORD,

You have increased the nation;

You are glorified;

You have expanded

all the borders of the land.

— Isaiah 26:15 (NKJV)

Let me remind you that in referring to stakeholders I mean to include all those who substantially contribute to, benefit from, or are affected by a company and its actions: end users, customers, customers’ customers, distributors, dealers, agents, suppliers, suppliers’ suppliers, employees, employees’ families, partners, shareholders, lenders, lessors, neighbors, the communities in which the firm operates, and anyone else who is significantly impacted by what the company does. Although most of these stakeholders have no ownership in the company, be sure to consider how encouraging and facilitating such ownership could be an effective way to expand stakeholder value for many more people.

Here are a few of the possible stakeholder-value improvements to help you begin to appreciate what benefits could be provided:

• End users can gain knowledge and practical advantages that expand the types, quantities, and usefulness of the benefits they receive from the company’s offerings. Readers who successfully apply the lessons in Advanced Business: Exponentially Increase Stakeholder Value will have received one kind of substantial value improvement from this book.

• Similar effects can also occur for your customers and their customers, often in terms of their obtaining greater numbers of and more profitable customers for their own organizations, along with knowledge and practical advantages that can be used to increase the value of what your customers provide to their own customers and end users.

• Distributors, dealers, and agents can gain from having more appealing offerings that add much increased value for those they distribute to, deal with, and sell to, as well as for their own organizations.

• Suppliers and their suppliers can benefit from becoming vastly more effective, often gaining market share by selling more to your company, as well as to your competitors.

• Employees can see their lives improve through sharing in some of the company’s success while enjoying better, more satisfying working conditions, career opportunities, and personal lives.

• Employees’ families can experience better lives through any increased time they can spend with the employee, a better working environment for employees that facilitates improved family relationships, any company-provided family-enhancing benefits, and whatever increased income and wealth the employee obtains that is used for the family’s benefit.

• Partners can gain wealth and knowledge to apply in their own businesses through ownership and participation in joint ventures, as well as through investments in and with your company.

• Shareholders can be directly enriched through the expanded value of their equity ownership. The value growth from an initial investment of $10,000 in an advanced-business company can be sufficient to support many future generations of the equity owner’s family.

• Lenders will have less risk of not being repaid, as well as an opportunity to share in the expanded ownership value of your company whenever your company borrows money through debt instruments that are convertible into equity.

• Lessors can enjoy similar benefits to those gained by lenders, while also gaining the opportunity to do more business with your organization.

• Neighbors and the communities you serve can benefit from your company eliminating any problems it causes while these stakeholders can also receive new benefits designed to make it more attractive for the company, its employees, and neighbors to spend time in the vicinity of the company’s activities.

• Anyone else substantially affected by your company can gain from any negative effects being eliminated, receiving more of any existing benefits, and gaining access to any new benefits.

As I mention in the Introduction, please note that effectively adding such stakeholder benefits can be done in ways that greatly expand profits, cash flow, and ownership value for your company. Such consequences follow because these sorts of stakeholder benefits also increase stakeholders’ interest in, types of activities for, and effectiveness in usefully contributing to your company’s success. Keep these connections in mind as you look for such ways to add to stakeholder value.

In Lesson One, we look at enhancing the economic value of benefits received by end users of a company’s offerings. End users are those who actually employ what your company offers, rather than either selling or providing the offering to someone else. Ways to increase such value include adding more helpful features and qualities to an offering, making it easier or less costly to gain benefits from using the offering, and enhancing the ability of end users to gain full advantage from using the offering. Consequently, your company will benefit from their expanded usage.

In Lesson Two, we consider what can be done to increase value for customers and their customers so that they will greatly expand their purchases. We study transferring knowledge, as well as at supplying offerings so valuable that they almost automatically enhance value for customers.

During Lesson Three, we examine improving relationships with distributors, dealers, and agents. Instead of the company and these stakeholders taking a self-centered, short-term focus, such relationships should take a long-term perspective on becoming more mutually rewarding. Doing so means finding important values that distributors, dealers, and agents can provide to enhance benefits for customers and end users. Upgrading the effectiveness of such organizations can also be done less expensively by allowing them to obtain stock options in your company tied to their excellent performance.

Adding value for suppliers and their suppliers is the topic of Lesson Four. Many times your organization will not be able to add much more value for stakeholders unless suppliers provide you with goods and services that allow you to effectively enhance your capabilities and choices. In this lesson, we reverse the focus from Lesson Two on how to add value to customers to look, instead, into the supply chain to see what can be done there by your organization that will ultimately improve benefits for your customers and end users.

Lesson Five considers ways to better compensate employees in ways that will increase the firm’s value. In addition, we look at how to overcome the most common causes of employee complaints: lack of respect from supervisors, inadequate preparation and insufficient resources to do a good job, overly demanding work environments, unrealistic expectations for the employee’s performance, and unpleasant relations with peers.

In Lesson Six, we discuss improving the impact of the employees’ work on their families. This lesson describes ways that a company can make it possible for families to enhance their lives in all dimensions, from the spiritual to dealing with worldly problems.

Using partnerships to add more value is Lesson Seven’s topic. Adding complementary skills, knowledge, and resources can lead to huge value improvements. However, such partnerships too often focus on outperforming the competition at the expense of adding more value for other stakeholders. We look at the importance of changing the focus of partnerships in this lesson.

For Lesson Eight, we explore the effects on shareholders of accomplishing the stock-price-value improvement goal of the fourth complementary 2,000 percent solution. This lesson also discusses the need for owners to understand the importance of adding stakeholder value for one and all.

Benefits for lenders and lessors is the topic of Lesson Nine. Creating a more financially sound organization with much enhanced access to low-cost capital decreases risk for lenders and lessors. By allowing these stakeholders to participate in your expansion of shareholder value, you can enrich their organizations while also expanding how much profitable business you provide to your lenders and lessors.

Lesson Ten considers neighbors and how they can benefit from your company seeking to add value for them. Opportunities exist to reduce negative impacts, increase the value of real estate they own, and provide other noneconomic benefits, such as more desirable choices of residences and neighborhoods. Companies benefit by having fewer restrictions placed on them and being able to enter new neighborhoods more easily and less expensively.

In Lesson Eleven, we complete this part by looking at ideas and examples of what companies and their leaders can do to enhance value for the communities in which the firms conduct business.

Lesson One

Stakeholder Benefits for

End Users

“Give, and it will be given to you:

good measure, pressed down, shaken together,

and running over will be put into your bosom.

For with the same measure that you use,

it will be measured back to you.”

— Luke 6:38 (NKJV)

End users of offerings can be individuals, families, small groups, nonprofit organizations, and governments, as well as for-profit companies. How might end users gain immense increases in the value of their benefits? While there are many potential value-improvement triggers for end users, including customers and other stakeholders teaching end users how to increase all forms of stakeholder value, value increases more typically occur due to your company or the end user’s supplier providing offerings that automatically deliver either all or most of the value improvement.

Let me supply an example related to 2,000 percent solutions (ways of accomplishing 20 times more with the same or less time, effort, and resources, as described in The 2,000 Percent Solution, AMACOM, 1999). If I write a book that tells end users how to make 160,000 times more profits (as The 2,000 Percent Squared Solution does by directing that the lessons in the book be repeated for expanding revenues by 20 times and reducing costs by 20 times), end users who buy, read, successfully apply, and keep effectively reapplying the lessons of that book can eventually enjoy 160,000 times more profits. In the process, the economic values of their businesses would typically increase by about 160,000 times, as well.

Now, let’s now consider working on expanding cash flow by 64,000,000 times, such as by repeatedly applying the lessons in Business Basics. When done correctly, cash flow will increase by that amount, as will the economic values of the businesses to which the lessons were applied.

The offering doesn’t have to be a product to cause large value increases. The offering can be a service. Let’s consider The Billionaire Entrepreneurs’ Master Mind. After learning how to expand the market and revenues by 20 times and to reduce costs by 96 percent for each offering, end users of this service who apply the lessons can gain 400 times more profits. If end users then also learn and apply how to reduce investment intensity by 96 percent, their cash flow also increases by 8,000 times (a 20-fold increase over just applying the first two complementary 2,000 percent solutions). Putting in place a third such improvement will equate to adding another 20 times increase in economic value for end users over the two complementary solutions. If end users then successfully reapply each of the three lessons twice, their cash flow expands by another 511,999,992,000 times. And the master mind doesn’t charge 511,999,992,000 times more … so the value for members of The Billionaire Entrepreneurs’ Master Mind compared to the cost in time, effort, and money just keeps getting better and better as they apply more of what they learn.

These product and service examples relate to knowledge transfer for end uses. Benefit transfers through offerings that add stakeholder value can be more direct than that.

Here’s a product example. The Amazon.com Kindle reader and the company’s support systems for producing and distributing written materials have revolutionized the potential for someone to learn. On a Kindle reader, hundreds of books can be stored and easily accessed for comparing one source to another. The type size can be adjusted to make reading easier. Each book costs less because it is in a digital version. Because a whole library is now portable, study can be done in more environments, including while traveling or during breaks at work. If we include the value of the space-saving feature of substituting for physical books to reduce how much office or living space someone needs, the economic benefits are undoubtedly much greater than 20 times the cost of a Kindle for anyone engaged in a learning project, such as writing a thesis or dissertation. And to gain the benefit, a learner just has to buy and use the product and related books in this form.

Let’s look at a service example of direct increases in the value of benefits. Imagine that an end user’s supplier has valuable rights that the end user is allowed to exercise. Such rights might involve being able to share valuable information with other people in a network, perhaps something like an individual controlling a Facebook-like page on an access-controlled network that provides large numbers of people with extremely easy ways to share highly useful information. Another analogy might be a Web site on an Internet-like network accessible by specialized search engines capable of always taking you to exactly where you need to go. In such cases, the supplier’s network is made more valuable by having more end users who share greater amounts of helpful information. The same value-multiplying effect on benefits also applies to the supplier’s ownership value.

A practical example of this service concept would be a highly efficient branded cooperative that made small companies more effective. The cooperative might do almost everything for the small companies except actually deal with their customers. As a result, each end-user company would gain the same low-cost benefits as everyone else in the cooperative, while also benefiting from owning part of the cooperative. The value of each end user’s company could then expand even more if the cooperative could legally assign territories so that the number of end-user companies was held at the optimum level relative to the number of their customers and prospects. In a country that lacked enough qualified providers of a certain essential type (such as plumbers, for instance), such a cooperative might also be able to advocate more appropriate standards for government licensing and gain a virtual monopoly over training providers. If done properly, the cooperative might help a youth with no skills become the successful owner of a highly profitable and rapidly growing business.

You can see from many of these examples that gaining a 20-times value enhancement for end users will not always be automatic. There may be some learning, thinking, and working involved for the end users. In many cases, it may well be that the supplier’s supplier (and so on) will have to play an important role in creating the step-up value for the end user before the large increase in economic value will occur.

Think of the potential. If an end user can gain 20 times more economic value from an offering, the value of the end user’s activities related to the offering are often going to go up by more than 20 times the combination of the offering’s value, plus the time, money, and effort involved in using it. When that’s the case, what are end users going to do? Well, they are probably going to find a way to buy and use more offerings from the supplier. When that happens, the end user’s economic value will continue to soar in exponential ways. It’s like having the ability to turn lead into gold at little or no cost.

What can end users do with that potential? They can cut costs of what they do by 20 times. They can work 96 percent less. They can increase their incomes by 20 times. They can invest 20 times more. And so on. The choice is the end user’s. Such flexibility should make a person feel more peaceful before going to sleep each night.

You may be wondering how all of this potential applies to those who have no enterprise to benefit from using offering enhancements. In such cases, freed-up time can be used to engage in other personally or economically valuable activities. Or for someone who feels he or she has enough personal value in hand, the time can be solely applied to being more fruitful for the Lord. Naturally, the potential value increase will not always be realized unless end users are provided with information and encouragement to make constructive use of whatever value they obtain.

What’s the key lesson? By increasing personal or economic value for end users by 20 times as part of the fourth complementary 2,000 percent solution, an end user can gain by applying the benefits to enhance many other dimensions of value. In addition, end users can apply the economic benefits to gain even more benefits by purchasing more offerings, absorbing and applying more transferred knowledge, or selectively reinvesting in valuable activities.

Your Lesson One Assignments

1. How can your organization’s offerings be improved in ways that will increase the economic or personal value of your end users or their activities by 20 times?

2. How can your organization transfer knowledge to raise end users’ economic or personal value by 20 times?

3. How can your organization provide exclusive arrangements to end users that will increase their economic or personal value by 20 times?

4. How can you teach end users to increase their value by 20 times, independent of any increased value of offerings, any operational knowledge transfers, or any exclusive arrangements?

5. How can these end-user benefits be transformed into improved relationships that will make it easier for your company to increase by 20 times its economic value and ability to provide for other stakeholders?

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